Chapter 1
Transactions
Business and Finance: General
20732: Boycotting the products of kuffaar who are
hostile towards Islam
Question:
Is It generally permissible to do business with
Jews, companies that may have Jewish owners or
shareholders, companies that may have franchises in Israel,
etc.? Recently many Muslims have been saying that it is
haraam to have any business dealings with the Jews
whatsoever. To the best of my limited knowledge, even when
the Muslims were fighting the Jews in the time of the
Prophet, sallallaahu `alayhi wa sallam, he did not forbid trade
with them, and when he died his shield or armor was with
a Jews as collateral on a loan. Please inform us as to
the correct position on this issue.
Answer:
Praise be to Allaah.
Firstly:
The basic principle is that it is permissible to interact
and do business, buying and selling, with the Jews and
others, because it is proven that the Prophet (peace and
blessings of Allaah be upon him) and his companions
interacted with the Jews of Madeenah, buying and selling,
lending and putting items in pledge, and other kinds of
interactions that are permissible according to our religion. The
Jews with whom the Prophet (peace and blessings of
Allaah be upon him) interacted were people with whom
the Muslims had a treaty; those who broke the treaty
were either killed or expelled, or were left alone if that
served some interest.
But there is evidence which indicates that it is
permissible to buy and sell with kuffaar who are in a state of
war against the Muslims.
Imam al-Bukhaari (may Allaah have mercy on him) said:
Chapter: Buying and selling with the mushrikeen
and people who are at war with Islam.
Then he narrated (2216) that `Abd al-Rahmaan ibn
Abi Bakr (may Allaah be pleased with him) said: We
were with the Prophet (peace and blessings of Allaah be
upon him) then a mushrik man came with some sheep that
he was driving. The Prophet (peace and blessings of
Allaah be upon him) said: "Are they for sale or a gift?" He
said: "For sale." So he bought a sheep from him.
Al-Nawawi (may Allaah have mercy on him) said in
Sharh Saheeh Muslim (11/14):
The Muslims are unanimously agreed that it is
permissible to interact with ahl al-dhimmah (non-Muslims
living under Muslim rule) and other kuffaar, so long as the
object of the transaction is not haraam, but it is not
permissible for a Muslim to sell weapons or tools of war to those
who are waging war against the Muslims, or anything that
helps them to support their religion.
Ibn Battaal said: dealing with the kuffaar is
permissible, except for selling things to those who are at war with
the Muslims that may help them against the Muslims.
It was narrated in al-Majmoo' (9/432) that there
is scholarly consensus that it is forbidden to sell
weapons to people who are waging war against Muslims.
The reason for that is obvious, which is that these
weapons will be used to fight the Muslims.
Secondly:
There is no doubt that it is prescribed to engage in
jihad against the enemies of Allaah, Jews and others, with
our lives and our wealth. That includes every means that
will weaken their economy and cause them harm. Money
is the lifeblood of wars ancient and modern.
The Muslims in general should cooperate in
righteousness and piety and help the Muslims in all places in ways
that will lead them to prevail and strengthen them and
enable them to manifest the symbols of religion, to practise
the teachings of Islam and to implement the rulings
of sharee'ah and carry out hudood punishments, and whatever will lead to their victory over the kuffaar,
Jews, Christians and others. They should strive their hardest
in jihad against the enemies of Allaah with all the means
at their disposal. The Prophet (peace and blessings of
Allaah be upon him) said: "Strive against the mushrikeen
with your wealth, your lives and your tongues
(speech)." Narrated by Abu Dawood, 2504; classed as saheeh by
al-Albaani in Saheeh Abi Dawood.
The Muslims have to help the mujaahideen as much
as they can, and do everything that will strengthen
Islam and the Muslims. They must also strive against the
kuffaar in whatever ways they can, and do everything they can
to weaken the kuffaar and the enemies of Islam. They
should not employ them as workers such as typists,
accountants, engineers or servants in any kind of service that
gives them more power to collect the wealth of the
Muslims and use it against them.
Conclusion:
The one who boycotts the products of the kuffaar
who are waging war against Islam, intending thereby to
make manifest the fact that he does not like or support
them, and to weaken their economy, will be rewarded in
sha Allah for this good intention.
Whoever deals with them on the basis of the
principle that it is permissible to deal with the kuffaar _
especially buying things that he needs _ there is no sin on him,
in sha Allaah, and that does not affect the principle of
al-wala' wa'l-bara' (loyalty and friendship vs. disavowal
and enmity) in Islam.
The Standing Committee was asked: What is the
ruling on Muslims not cooperating with and not wanting to
buy from Muslims, and preferring to buy from the kuffaar;
is this permissible or forbidden?
They replied:
The basic principle is that it is permissible for the
Muslim to buy whatever he needs of things that Allaah
has permitted from both Muslims and kaafirs. The
Prophet (peace and blessings of Allaah be upon him) bought
from the Jews, but if a Muslim turns away from dealing
with his fellow Muslim for no good reason _ such as deceit
or high prices or bad products _ and he prefer to buys
from kaafirs with no reason, that is haraam, because it
implies that one is befriending the kuffaar, approving of them
and liking them, and because it involves reducing
the Muslims' business and preventing them from selling
their goods, if the Muslim takes that as his habit. But if there
is a reason for that, such as those mentioned above, then
he should advise his Muslim brother to give up these
faults. If he accepts the advice, then praise be to Allaah,
otherwise he should go to someone else, even if he is a kaafir, if
he is honest and decent in his dealings.
Fataawa al-Lajnah al-Daa'imah, 13/18
And Allaah knows best.
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39761: It is not permissible to buy a product then sell
it when it is still in the warehouse of the first vendor, before
it has been moved
Question:
Some traders buy a product then they do not
take possession of it or check it, rather they take a receipt
which shows that they have paid for it and it is now theirs,
and they leave it in the warehouse of the first vendor
from whom they bought it. Then the second vendor sells it
to someone else, whilst it is still in the storehouse of
the first vendor. What is the ruling on that?.
Answer:
Praise be to Allaah.
It is not permissible for the purchaser of this product
to sell it so long as it is still in the possession of the
seller, until the purchaser has taken possession of it and
moved it to his house or the marketplace, because of the
saheeh ahaadeeth that have been narrated from the Prophet
(peace and blessings of Allaah be upon him) concerning
that. For example, he (peace and blessings of Allaah be
upon him) said: "It is not permissible to sell something
on condition that the purchaser lend you something, and it
is not permissible to have two conditions in one
transaction, and no profit is permissible unless possession has
been taken of the goods, and you cannot sell what is not
in your possession." Narrated by Ahmad and the authors
of al-Sunan with a saheeh isnaad.
And he (peace and blessings of Allaah be upon him)
said to al-Hakeem ibn Hizaam: "Do not sell that which
you do not have." Narrated by the five except Abu
Dawood, with a jayyid isnaad.
And it was narrated from Zayd ibn Thaabit (may
Allaah be pleased with him) that the Prophet (peace and
blessings of Allaah be upon him) forbade selling a product in
the place where it was bought until the merchants have
taken possession of it and moved it to their own
property. Narrated by Ahmad and Abu Dawood; classed as
saheeh by Ibn Hibbaan and al-Haakim.
Similarly, if a person buys from the purchaser, it is
not permissible for him to sell it until he transfers it to
his house or to another place in the marketplace, because
of the ahaadeeth quoted and other ahaadeeth which
convey the same meaning. And Allaah is the Source of strength.
Shaykh `Abd al-`Azeez ibn Baaz . Fiqh wa Fataawa
al-Buyoo' by Ashraf `Abd al-Maqsood, 309..
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46667: Can he rent the traditional set of jewellery and
then return it to the jeweller in order to get married?
Question:
A young man proposed marriage, but he cannot
afford the traditional set of jewellery. He agreed with his
fiancée to bring the jeweller to the house in order to please
her family, then the young man will return the traditional
set of jewellery to the jeweller one month after
the celebration, in return for the groom paying the
jeweller for renting this set for this one-month period,
according to the price set by the jeweller. Is this regarded as riba?
Is this haraam or halaal, because the young man's
marriage to this girl depends on his bringing this jewellery
because her family are insisting on that?
May Allaah reward you with good.
Answer:
Praise be to Allaah.
Firstly:
The Standing Committee was asked a similar
question, about renting gold and silver jewellery for the woman
to wear for her wedding, then returning it two weeks
later, for example, and paying for that. They replied:
The basic principle is that it is permissible to rent
gold and silver jewellery for one of the two currencies, or
for something else, for a known rent and period of time,
after which the one who rents the jewellery is to return it.
And there is nothing wrong with taking collateral for that.
Fataawa al-Lajnah al-Daa'imah, 15/79-80
The two currencies are gold and silver, i.e., it
is permissible to pay the rental fee in gold or silver, or
in the banknotes that people use nowadays. And
Allaah knows best.
Secondly:
Women's fathers and guardians are advised not to
make excessive demands with regard to the mahr (dowry),
and not to burden prospective husbands with
unreasonable demands as regards the mahr, traditional set of
jewellery and furniture, etc. Such excessive demands
are condemned in sharee'ah, as are the harmful
consequences to which they lead. See question no.
[12572].
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36410: He bought a car by installments from the bank,
then he sold it so that he could use the money to get married
Question:
I am a young man and I would to complete half of
my religion by getting married. I proposed to a girl but
there are a lot of expenses involved in getting married,
namely the mahr etc. I cannot afford all that, so one of the
brothers told me that the banks have a system called
muraabahah (purchase scheme). So I went there and the bank
official told me that I should go to one of the car showrooms
(he did not specify which one) and choose a car, and the
bank will buy it and sell it to me, in return for taking a profit
of 40,741 riyals on an original price of 95,000 riyals, over
a period of 6.5 years. I do not have any other option
because my father is deeply in debt. I tried to borrow the
money from anyone who would give it without
demanding interest, but I could not find anyone except one of
the banks. Any other method of raising the money
without any kind of buying or selling (i.e., money for money),
is regarded as blatant riba (usury). I want to get
married, and I fear temptation for myself.
Please advise us, may Allaah reward you.
Answer:
Praise be to Allaah.
This transaction that you want to engage in includes
two things:
1 _ Buying a car through the bank. This is not
permissible unless two conditions are met:
(i) That the car should be owned by the bank. So the
bank should buy the car for itself from the showroom,
before selling it to you.
(ii) That the bank should take possession of the car
by moving it physically from the showroom before selling
it to you.
If both or either of these two conditions are not met,
then the transaction is haraam. See question no.
36408.
2 _ Selling this car which has only been bought for
this purpose, namely obtaining money. This is what is
called tawarruq or buying and selling in order to obtain
wariq, i.e., silver.
This is permissible according to the majority of
scholars, subject to the condition that the car be sold to
someone other than the person from whom you bought it.
It says in Fataawa al-Lajnah al-Daa'imah (13/161):
We hope that you can advise us about the issue of
tuwarruq and tell us what the ruling is on that.
The Committee replied:
Tuwarruq means buying a product and deferring
the payment, then selling it for payment on the spot
to someone other than the person from whom you bought
it for a deferred payment, in order to benefit from its
price. There is nothing wrong with this transaction
according to the majority of scholars.
End quote.
See also question no. 45042.
If the two conditions outlined above are met, there is
no sin on you in sha Allaah.
And we ask Allaah to help you and guide you.
And Allaah knows best.
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36408: What conditions should be met in order for
the bank's purchase scheme (muraabahah) to be
considered permissible
Question:
My question is: how sound is the following
transaction, what is the ruling on it, what is the ruling on
someone who has already gotten involved in it and what should
he do?
The details of this muraabahah purchase program (as it
is called by the bank) are as follows:
1 _ The buyer goes and gets a price list for the bank
from the main supplier of the product (a car showroom
or agency, for example), including a description of the
car, its colour, features and price (100,000 riyals, for example).
2 _ The buyer obtains a letter stating his salary, and
fills out the required forms to have part of his salary
deposited in the bank for the period agreed upon with the bank
(for example, three years), to pay off the total cost
which includes the basic price plus the bank's profit
(for example, 7%).
3 _ The contract is drawn up, including the
processing fees (1000 riyals for example) and is signed by the
bank, the buyer and the witnesses.
4 _ The bank issues a draft cheque payable to
the showroom or agency (the supplier) for the value of
the car as quoted in the price list referred to in #1 above.
5 _ The buyer takes the cheque and gives it to the
supplier, who then does all the paperwork needed to register
the car in the name of the buyer and gives it to him.
Answer:
Praise be to Allaah.
This transaction is haraam and is not permitted.
Basically this transaction is a loan with interest, which is the
essence of riba (usury), because the bank gives the buyer a
cheque for 100,000 and takes payment for it in
installments, adding interest and what they call processing fees.
Calling this a purchase does not make it
permissible, because this deal is essentially a riba-based loan and
not a sale or purchase. Also, the bank is not buying the
car from the showroom or selling it to the buyer, rather it
is giving him a cheque for that amount.
Buying products (whether cars or anything else)
through the bank is not permissible unless two conditions are met:
1 _ The seller should take possession of this product
before selling it. So the bank should buy the car, for
example, from the showroom for itself.
2 _ The bank should take the car into its own
possession by moving it (physically) from the showroom
before selling it to the customer.
If both or either of two conditions are not met, then
the transaction is haraam, and the reason for that is that
when the bank did not buy the car for itself in a real
sense, rather it only issued a cheque on behalf of its
customer, that was a riba-based loan, because essentially the
bank loaned the price of the car (say, 100,000 riyals) to
the customer on the basis that it would take back
170,000 riyals.
If the bank buys the car then sells it before
taking possession of it, that goes against the words of the
Prophet (peace and blessings of Allaah be upon him) to
Hakeem ibn Hizaam: "When you buy something, do not sell
it until you have taken possession of it." Narrated by
Ahmed, 15399; al-Nasaa'i, 4613; classed as saheeh by
al-Albaani in Saheeh al-Jaami', no. 342.
Al-Daaraqutni and Abu Dawood (3499) narrated
from Zayd ibn Thaabit that the Prophet (peace and
blessings of Allaah be upon him) forbade selling goods when
they have been bought, until the merchants had added them
to their own goods. This hadeeth was classed as hasan
by al-Albaani in Saheeh Abi Dawood.
In al-Saheehayn it is narrated from Ibn `Abbaas that
the Prophet (peace and blessings of Allaah be upon him)
said: "Whoever buys food, let him not sell it until he
has acquired it." Al-Bukhaari, 2132; Muslim, 1525.
Muslim added: Ibn `Abbaas said: I think that this applies
to everything else _ i.e., there is no difference between
food and other things in this regard. Based on this, the
bank does not have the right to sell the car until it has
taken possession of it. Goods are taken possession of
according to custom, and taking possession of a car means that it
is moved physically from where it was. Shaykh Ibn `Uthaymeen (may Allaah have mercy on him)
said: "Whatever is moveable, such as garments, animals
and cars etc, possession is taken of it by moving it,
because this is the custom.
From Sharh al-Mumti', 8/381.
It says in Fataawa al-Lajnah al-Daa'imah (13/153): If
a person asks someone to buy a specific car for him or
a car that has certain features that he describes, and
promises to buy it from him, and he buys it and takes possession
of it, it is permissible for the one who asked for it to buy
it from him after that, with cash or in installments for
a known profit. This does not come under the heading of
a man selling something that he does not own, because
the one who was asked for the product only sold it to the
one who asked for it after he had bought it and
taken possession of it. He does not have the right to sell it to
his friend, for example, before buying it, or after buying
it but before taking possession of it, because the
Prophet (peace and blessings of Allaah be upon him)
forbade selling a product where it was bought, until the
merchants had added them to their own goods. End quote.
With regard to the one who engaged in such a
transaction in the past, if he did not know at the time that it is
haraam, and he did that thinking that it was permissible, then
he does not have to do anything, because Allaah
says (interpretation of the meaning):
"So whosoever receives an admonition from his Lord
and stops eating Ribaa, shall not be punished for the past"
[al-Baqarah 2:275]
See also Question no. 2492.
But whoever did that knowing that it is haraam
has committed the major sin of riba and exposed himself to
a declaration of war from Allaah and His Messenger.
Allaah says (interpretation of the meaning):
"O you who believe! Be afraid of Allaah and give
up what remains (due to you) from Ribaa (from now
onward) if you are (really) believers.
And if you do not do it, then take a notice of war
from Allaah and His Messenger but if you repent, you
shall have your capital sums. Deal not unjustly (by asking
more than your capital sums), and you shall not be dealt
with unjustly (by receiving less than your capital sums)"
[al-Baqarah 2:278-279]
So he has to repent from this major sin, and resolve
not to do that again.
With regard to making use of the car that was bought
in this manner, there is nothing wrong with doing so, in
sha Allaah, after repenting and regretting. See question
no. 22905.
And Allaah knows best.
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36397: Giving up his place on the property
investment waiting list in return for a sum of money
Question:
My brother has applied to the property investment
fund and he is still waiting for his turn on the list. Is
it permissible for him to give his turn to me, if I give him
a specific amount of money in return for that?.
Answer:
Praise be to Allaah.
There is nothing wrong with him giving up his place
on the property investment waiting list in return for a sum
of money, because he is giving up a financial right, and it
is permissible to sell financial rights in return
for compensation. But it is essential to have the
permission of the bank handling this investment. If the bank
gives permission and the two parties agree that one will
pay money in order to take the place of the other, then this
is permissible and there is nothing wrong with it.
And Allaah knows best.
A fatwa of Dr Khaalid al-Mushayqih. (www.islam-qa.com)
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20091: Leasing a car
Question:
Is leasing a car in the US haraam? I don't know if there
is any interest involved or not.
Answer:
Praise be to Allaah.
The ruling on a thing is based on the way it is
understood, so it is not possible to state whether this purchase
is permissible or forbidden without studying the
contract and its clauses.
There are two common forms of buying and selling
by installments (leasing):
1 _ Where you buy a car from the owner, whether
the owner is an individual or a company, on the basis
that you will pay for it in installments. There is nothing
wrong with this, even if the price in installments is higher
than the price if paid for in cash.
See question no. 13973.
2 _ Where you buy the car through a company or
person who does not own it, rather they pay the price to the
owner on your behalf, on the basis that you will pay off the
price in installments with interest. This is haraam, because
what this contract means is that this company or bank is
giving you an interest-based loan, and is not buying anything
in such a way that it becomes their property so that they
can sell it on to you.
See question no. 10958
But if we assume that the bank buys the car in real
terms and becomes its owner, then sells it to you in
installments for a higher price, there is nothing wrong with that;
this is akin to the first scenario.
The Standing Committee was asked:
A man asked his friend to buy a car for him with
cash, then sell it to him for a deferred payment with extra
money as a profit. Is this regarded as riba?
They replied:
If a man asks another to buy a specific car for him or a
car that meets certain requirements that he stipulates,
and promises to buy it from him, and he buys it from the
one whom he asked to do that and takes possession of it, it
is permissible for the one who asked for it to buy it
from him after that for cash or in installments with a
specific amount of extra money as a profit. This is not a kind
of selling what one does not have, because the one who
you asked for this product is selling it to the one who
asked for it after buying it and taking possession of it. He
does not have the right to sell it to his friend, for
example, before he buys it, or after he buys it and before he
takes possession of it, because the Prophet (peace and
blessings of Allaah be upon him) forbade selling goods until
the merchant has them in his own possession.
Fataawa al-Lajnah al-Daa'imah, 13/152
And Allaah knows best.
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33625: "No returns or exchanges on goods sold"
Question:
What is the shar'i ruling on writing the sentence
"No returns or exchanges on goods sold" which
some shopkeepers write on their receipts? Is this
condition permissible according to sharee'ah?.
Answer:
Praise be to Allaah.
If a product is sold subject to the condition that it
cannot be returned or exchanged, that is not permissible,
because it is an invalid condition which may lead to harm
or confusion, and because the intention of the vendor
in stipulating this condition is to oblige the purchaser to
keep the product even if it is faulty. This condition does
not exonerate him if faults are found in the product
because if it is faulty then he should exchange the faulty
product or the purchaser should be given a reduction, because
the full price is given in exchange for a sound product, and
if the vendor takes the full price when the product is
faulty, he has taken it unlawfully.
According to sharee'ah, customary conditions are as
valid as verbal conditions. Customarily it is assumed that
the product will be free of faults, so the purchaser is
justified in returning it if it is faulty.
And Allaah is the Source of strength.
Al-Lajnah al-Daa'imah li'l-Buhooth al-`Ilmiyyah
wa'l-Ifta, fatwa no. 17388. (www.islam-qa.com)
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39507: Selling animals by weight
Question:
Is it permissible to sell animals whose meat may be
eaten, such as chickens, live by weight? Please note that
this method is widespread among us.
Answer:
Praise be to Allaah.
Yes, it is permissible to sell animals live by weight.
The Standing Committee was asked: is it permissible
to buy chickens and sheep by weight, whether they are
alive or have been slaughtered?
They replied: the basic principle is that
transactions between Muslims are permissible except those which
are forbidden by a shar'i text. Hence we know that it
is permissible to buy chickens and sheep by weight, and
we know of no reason in sharee'ah why that should not
be allowed.
Fataawa al-Lajnah al-Daa'imah, 13/290
And it also says in Fataawa al-Lajnah
al-Daa'imah, 13/290:
It is permissible to sell sheep and other animals live
by weight, whether they are weighed by kilograms
or otherwise, because the purpose is to decide how
much they are worth, which is decided by weight.
And it also says (13/289): It is permissible to sell
animals by weight, and it is permissible to sell them by
sight without weighing them, according to scholarly
consensus. The permissibility of selling them by weight is not
affected by what is in its stomach of food etc., because that is
part of it. So it is permissible to sell them by weight.
And Allaah knows best.
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37701: Selling food for charity at iftaar
Question:
Can we sell food for charity at an iftaar in the
mosque, the proceeds of which are to be spent on poor people
living near the mosque?.
Answer:
Praise be to Allaah.
What is meant by selling food for charity is that
some people prepare food of whatever type at home, then
they sell it and they donate the money raised to a
charitable project or give it in charity.
This is a good deed and a kind of charity, and
cooperating in charity, for which a person earns reward as do all
those who participate in it, whether they contribute money
or efforts, etc. All of that is included in the words of
Allaah (interpretation of the meaning):
"Help you one another in AlBirr and AtTaqwa
(virtue, righteousness and piety)"
[al-Maa'idah 5:2]
But we should note that the buying and selling should
be done outside the mosque itself, because it is haraam
to buy and sell inside the mosque. The Prophet (peace
and blessings of Allaah be upon him) said: "If you see
anyone buying and selling inside the mosque, say, `May
Allaah not cause your trade to be profitable.'" Narrated by
al-Tirmidhi, 1321; classed as saheeh by al-Albaani in
Saheeh al-Tirmidhi, 1066
And Allaah knows best.
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26817: He stipulates an additional cost for purchase
by installments, separate from the price
Question:
I wanted to buy a car by installments, but the vendor
said to me: Choose the period after which you will pay
the price, on condition that it is no more than a year. But
this car costs thirty thousand in cash, and if bought
by installments he will charge three percent each month. If
I pay after one month he will charge three percent
in addition to the price, after two months he will charge
six percent, after ten months thirty percent, and so on. Is
this halaal or haraam?.
Answer:
Praise be to Allaah.
Selling by installments for an increased price
is permissible.
But the scholars stated that the additional amount
should not be stipulated in the form of interest that is
separate from the price. If the vendor does that then the
transaction is haraam or makrooh.
Ibn Qudaamah (may Allaah have mercy on him) said
in al-Mughni (2/266):
If he says, I will sell it to you at cost for one hundred,
and I make a profit for one dirham for every ten, this
was regarded as makrooh by Ahmad, and it was narrated
from Ibn `Umar and Ibn `Abbaas that this is makrooh. We
do not know of any of the Sahaabah who held a
different opinion. It is regarded as makrooh but not in the sense
of being haraam.
Shaykh Ibn `Uthaymeen (may Allaah have mercy on
him) said in Risaalah fi Aqsaam
al-Mudaayanah:
If in the contract the vendor says, "I will sell you this
ten for eleven," then it is either makrooh or haraam. It
was narrated that Imam Ahmad said of such cases, It is as
if he is selling dirhams for dirhams, which is not right.
This is what Imam Ahmad said. Based on this, the correct
way of going about it is for the lender to work out the value
of the product and the amount of his profit, then he
should say to the borrower, "I will sell it to you for such
and such to be paid in one year."
One of the resolutions issued by the Fiqh Council
says the following:
According to sharee'ah, it is not permissible when
selling something to be paid for later, to stipulate in the
contract interest on the installments that is separate from the
price so that it is connected to the time involved, whether
the two parties agree to a rate of interest or they decide
to follow the current rate of interest used by the banks.
The way of putting this matter right, as may be
understood from the words of Shaykh Ibn `Uthaymeen quoted
above _ is for the vendor to say to the purchaser, "When
will you pay the price?" If he says, "After one year" _
for example _ the vendor should look at the value of the
item and work out the amount of the profit he wants, then
say to the purchaser, "I will sell it to you for such and such
on the basis that you will pay after one year" _ without
stating an additional cost that is separate from the price.
And Allaah knows best.
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13722: Stating one price for a product if paid for in
cash and another price if paid for in installments
Question:
Is it permissible to state one price for a product if
the purchaser is going to pay for it in cash, and another
price if the purchaser is going to pay for it in installments?
For example, this car costs fifty thousand in cash and
sixty thousand by installments?.
Answer:
Praise be to Allaah.
If the vendor says: this car costs fifty thousand if paid
for in cash and sixty thousand if paid for in installments,
one of two scenarios must apply:
1 _ The seller and purchaser part having agreed on
one price and method of payment. In this case the
transaction is valid.
2 _ If they separate without having agreed on the
price. This transaction is haraam and is not valid.
Al-Baghawi (may Allaah have mercy on him) said
in Sharh al-Sunnah _ concerning this second type
of transaction _ This is invalid according to the majority
of scholars, because it is not known which of them has
stated the price.
This is how many of the scholars interpreted the
Prophet's prohibition on doing two transactions in one.
Al-Tirmidhi (1152) narrated that Abu Hurayrah
(may Allaah be pleased with him) said: The Messenger
of Allaah (peace and blessings of Allaah be upon
him) forbade two transactions in one. This was classed
as saheeh by al-Albaani in Saheeh
al-Tirmidhi, 985.
Al-Tirmidhi said: this is what the scholars based
their views on. Some scholars interpreted it by saying that
two transactions in one means that the seller says, "I will
sell you this garment for ten in cash or for twenty
in installments, but when they part they have not agreed
on either of the transactions. If they part having agreed
on one of them, there is nothing wrong with that, if
the contract is based on one of them.
Al-Nasaa'i (may Allaah have mercy on him) said:
Two transactions in one means that a person says, "I will
sell you this product for one hundred dirhams in cash or
for two hundred dirhams in installments."
Al-Shawkaani said in Nayl al-Awtaar: The reason
why two transactions in one is forbidden is that the price
is not fixed because one thing is sold for two prices.
The Standing Committee was asked:
What is your opinion about selling a car of ten
thousand in cash or twelve thousand in installments?
They replied:
If a person sells a car to another for ten thousand
riyals, for example, if he pays cash, or for twelve thousand
riyals if payment is deferred, and they part after the
transaction is made without having agreed on either of the two
options _ the cash price or the price for delayed payment _
this transaction is not permissible and it is not valid,
because of the ambiguity concerning the final transaction
and whether the price is to be paid now or later. This is
how many of the scholars have understood the
Prophet's prohibition on making two transactions in one. This
was narrated by Ahmad, al-Nasaa'i and al-Tirmidhi,
and classed as saheeh by the latter. But if they agree
before they separate upon the price and one of the methods
of payment, either the price in cash or the price if
payment is deferred, and they separate having agreed upon
the specific details, then the transaction is permissible and
is valid because the price and conditions are known.
Fataawa al-Lajnah al-Daa'imah, 13/192
In another question:
If the vendor says, "This product costs ten riyals
if payment is deferred and five riyals if paid in cash,
what is the ruling on that?
The Committee replied:
If the situation is as you described, then the transaction
is not permissible, because it is a kind of two
transactions in one. It was proven that the Prophet (peace and
blessings of Allaah be upon him) forbade two transactions in
one, because that involves ambiguity that may lead to
conflicts and disputes.
Fataawa al-Lajnah, 13/197
Among the decisions of the Fiqh Council is the following:
It is permissible to increase the price for deferred
payment as opposed to immediate payment. It is also
permissible to state the price if paid in cash and another price
if payment is made in installments at known times. But
the transaction is not valid unless the two parties decide as
to whether this is to be paid in cash or paid later. If there
is some confusion as to whether the payment is to be
in cash or paid later, then there is no firm agreement on
one particular price, so this is not permissible according
to sharee'ah.
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13721: Selling by installments may be mustahabb
Question:
I sell by installments, and when I do so I charge
more than when selling for cash. Is it possible that I will
be rewarded because I am helping the Muslims to buy
what they need?.
Answer:
Praise be to Allaah.
Selling by installments for a higher price is permissible.
See Question no. 13973.
With regard to selling by installments, the ruling as far
as the seller is concerned may be that it is mustahabb
or permissible.
It may be mustahabb and he may be rewarded for it if
his intention is to be easy-going to the purchaser and to
help him to buy what he needs and he does not increase
the price in return for allowing payment by installments
if the customer is poor and in need, and he does not
put pressure on him to pay it when it becomes due. Rather
if the time for repayment comes and the customer does
not have the money, he should give him more time, or
let him off all or part of the price. Allaah says
(interpretation of the meaning):
"And if the debtor is in a hard time (has no money),
then grant him time till it is easy for him to repay; but if
you remit it by way of charity, that is better for you if you
did but know"
[al-Baqarah 2:280]
Shaykh al-Sa'di (may Allaah have mercy on him) said:
This means, if the one who owes the money is in
difficulty, his creditor must wait until things become easier for
him… If the creditor shows charity towards him _ by letting
him off all or part of the debt _ then that is better for
him. Tafseer al-Sa'di, p. 168
Al-Bukhaari (1307) and Muslim (1561) narrated that
Abu Mas'ood (may Allaah be pleased with him) said:
The Messenger of Allaah (peace and blessings of Allaah
be upon him) said: "A man from among those who
came before you was brought to account, and nothing good
was found in him, apart from the fact that he used to deal
with the people and he was well off, and he used to tell
his slaves to let off the (debtor) who was in difficulty.
Allaah said, `We have more right to that than him, let him off.'"
But if a dealer sells in installments and he increases
the price in return for payment by installments, this
is permissible. But some dealers sell only by
installments, so that their profits will be greater. Imam Ahmad
(may Allaah have mercy on him) stated that this is
makrooh, but if the dealer sells both by installments and for
cash, there is nothing wrong with that.
Shaykh al-Islam (Ibn Taymiyah _ may Allaah have
mercy on him) explained the reason for it being makrooh as
being that it comes under the heading of exploitation
because usually the one who buys with deferred payment is
the one who is unable to pay cash, so if a man only sells
by installments, it means that he is exploiting people
who are in need, but if he sells both for cash and
by installments, he is just an ordinary trader.
From Tahdheeb al-Sunan by Ibn al-Qayyim.
`Awn al-Ma'bood, 9/347
And Allaah knows best.
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14071: It is better not to buy in installments if you are
able to pay in cash
Question:
Is it permissible for me to buy something by
installments when I am able to pay for it in cash? Please note that
the price when bought in installments is greater than the
price if I pay in cash.
Answer:
Praise be to Allaah.
We have already stated in the answer to question no.
13973 that selling something by installments for a higher
price is permissible.
Although it is permissible, we should not be too lax
on this matter, especially if there is no need for it,
because buying by installments means buying with debt, and
we should not be too lax when it comes to taking loans;
rather we should not seek loans unless there is a need for it
and it is essential.
The Prophet (peace and blessings of Allaah be upon
him) used to seek refuge with Allaah from debt.
Al-Bukhaari (833) narrated from `Aa | 
